Softbank, the Japanese fund best known for its $100B Vision Fund and investments in Uber, WeWork and many of the biggest tech companies in the world, launched a $5B venture fund called the Softbank Innovation Fund. This fund had been rumored by Bloomberg and covered by LatAm List previously. Softbank has committed $2B to the fund.
Run by Marcelo Claure, the Bolivian former CEO of Sprint, the fund will invest into startups region wide, including Brazil, Mexico, Chile, Colombia, Argentina and more. The vision fund had previously invested in Latin American startups Loggi, Gympass, and 99.
With total Latin American Venture Capital investment reaching $2-3B in 2018, and the biggest venture capital funds in Latin America have previously been in the $150-$250M range, so this represents an order of magnitude shift for the venture capital industry and Latin American technology ecosystem.
“Latin America is on the cusp of becoming one of the most important economic regions in the world, and we anticipate significant growth in the decades ahead,” said Masayoshi Son, chairman and CEO of SoftBank, in a statement.
“There is so much innovation and disruption taking place in the region, and I believe the business opportunities have never been stronger,” said Claure. “The SoftBank Innovation Fund will become a major investor in transformative Latin American companies that are poised to redefine their industries and create new economic opportunities for millions of people.”
“SBG plans to invest in entrepreneurs throughout Latin America and use technology to help address the challenges faced by many emerging economies with the goal of improving the lives of millions of Latin Americans. I am grateful to our Chief Operating Officer Marcelo Claure for leading this initiative, in addition to his other responsibilities at SBG.”
As with other SoftBank investments that do not come out of its Vision Fund, the latter will potentially use this as a springboard to get involved as well. “Latin America presents significant opportunities for SoftBank Group, and the Vision Fund will have the ability to co-invest alongside the innovation Fund,” said Rajeev Misra, CEO of SoftBank Investment Advisers, who runs the Vision Fund. “Marcelo and team will offer invaluable expertise to help Latin American companies scale their operations, benefit from the greater SoftBank ecosystem, and grow into global market leaders.” The Vision Fund has come under some scrutiny because of its ties to Saudi money and the controversy surrounding that government’s human rights policies.
For investors like SoftBank, putting a lot of attention on this region makes a lot of sense. Not only does it help diversify by focusing on another (rapidly growing) region, but it gives the group one more way to sweeten the deal to invest in any fast-growing startup, by offering a helping hand in their efforts to expand to other regions by way of their network of contacts and existing services.